Consumer spending rose in August even as inflation rebounded
Consumer spending rose slightly in August while the prices for basic goods and services rose at a faster rate, according to data released Friday by the Commerce Department.
Personal consumption expenditures (PCE) — a measure of consumer spending — rose 0.4 percent in August and 0.1 percent after adjusting for inflation. Each had declined in July before ticking higher last month.
American households were willing to buy more in August despite prices rising 0.3 percent, according to the PCE price index, a gauge of inflation. Prices for goods and services other than food and energy rose at a much faster 0.6 percent clip in August, which will likely cause concern about the stubbornness of inflation.
After dipping in July, inflation recovered speed in August despite a slowing U.S. economy, the rising toll of Federal Reserve interest rate hikes and concerns about a looming recession. Despite those headwinds, American households have powered through to keep buying more goods and services — even when adjusted for inflation — as many businesses continue to hire workers as fast as they can.
American households saw their paychecks rise 0.4 percent in August as prices continued to rise, though by just 0.1 percent after adjusting for inflation.